Controversial subject - 'Domaining' or 'Website marketing'

[Bill Roy]

I have recently become aware that generally domain name resellers fall into 3 different camps.

1) Those that look for a quick profit on their registrations/purchases of domain names, these generally sell their domains to re-sellers (other domainers).

2) Those that take a long term approach to their investments looking either for end-user purchasers or development of their domain names. This is generally a much smaller group than Group 1 above.

3) Those that are oppotunistic, selling either to other re-sellers or end-users without preference and generally set a price for their domains that is above the apparent normal re-seller price and below what an end-user is likely to be willing or able or both what an end-user would be expected to pay. This is the largest of the three groups.

Obviously I doubt if any of the three groups can in any case be thought of as totally exclusive, some mismashing will occur (say a 75/25 or 25/75 split), but these are the three groups that are fairly distinct.

I started off personally in group 3 but have found myself more and more moving to group 2. I have never personally seen the point of or been attracted to group 1, although this is the second largest group.

None of the groups by the way are right or wrong, it is purely a personal preference of how one approaches the business of domaining.

I look on group 1 as being 'tactical domainers', generally out to make a quick profit, whilst group 2 can more readily be thought of as 'strategic domainers' who generally look for far larger returns on their investment, ahilst finally group 3 is of course where most of us started out and indeed how many experienced domainers continue to view the best way of participating in the business.

The reason this interests me is because I seem to note a difference in attitude when an internet business like Business.com is sold for circa $350 million. The tactical domainers seem to look on it as the price seems to high and the sale price is because of the business. The strategic domainers generally seem to see the domain name as an integral part of the business and cannot be so easily have its value evaluated as a percentage of the sales price, but rather the sale price reflects the potential of the developed website using that domain name.

Please note, no criticism is intended of anyone, but the psychology of the different groups is interesting to say the least.

 

[DomainLobe]

Very interesting insights - a psycho-sociological view.
I agree and am firmly entrenched in Group 3 despite a strong desire to be a solid group 2 member; just waiting to partner with an excellent programmer/developer.
Thanks for sharing your thoughts.

 

[3dGEEK]

a Hobby :smilewinkgrin:

 

[Seraphim]

I have recently become aware that generally domain name resellers fall into 3 different camps.

1) Those that look for a quick profit on their registrations/purchases of domain names, these generally sell their domains to re-sellers (other domainers).

2) Those that take a long term approach to their investments looking either for end-user purchasers or development of their domain names. This is generally a much smaller group than Group 1 above.

3) Those that are oppotunistic, selling either to other re-sellers or end-users without preference and generally set a price for their domains that is above the apparent normal re-seller price and below what an end-user is likely to be willing or able or both what an end-user would be expected to pay. This is the largest of the three groups.

Obviously I doubt if any of the three groups can in any case be thought of as totally exclusive, some mismashing will occur (say a 75/25 or 25/75 split), but these are the three groups that are fairly distinct.

I started off personally in group 3 but have found myself more and more moving to group 2. I have never personally seen the point of or been attracted to group 1, although this is the second largest group.

None of the groups by the way are right or wrong, it is purely a personal preference of how one approaches the business of domaining.

I look on group 1 as being 'tactical domainers', generally out to make a quick profit, whilst group 2 can more readily be thought of as 'strategic domainers' who generally look for far larger returns on their investment, ahilst finally group 3 is of course where most of us started out and indeed how many experienced domainers continue to view the best way of participating in the business.

The reason this interests me is because I seem to note a difference in attitude when an internet business like Business.com is sold for circa $350 million. The tactical domainers seem to look on it as the price seems to high and the sale price is because of the business. The strategic domainers generally seem to see the domain name as an integral part of the business and cannot be so easily have its value evaluated as a percentage of the sales price, but rather the sale price reflects the potential of the developed website using that domain name.

Please note, no criticism is intended of anyone, but the psychology of the different groups is interesting to say the least.

You forgot about [4], those people that make millions diving through Google's brain fart window's. I was brought here solely by Google's ranking precedence awarded to generic keyword based domains. Each time me and my generic one word domain wipe the floor with a multi million dollar cooperation in the Google search rankings war, I have to change my underwear. Google already bought me a house, at this point I'm in it purely for the ego awards.

 

[dadster]

Hey Bill,

Nice article!

I think I am more of a two - but not so long term a two, if I had a lot of premium names I might be more of a category 2. I also spend a good deal of time as a 1 - though quick money can be made, often as a 1 I kick myself in the head because I should have thought like a two before making the quick sale.

But the quick sale is like casting a line into a nicely stocked pond - maybe not the biggest fish in the pond but lots of little ones that taste just as good. There is a thrill in a sale - no matter how large or small.

The trick is having the patience to leave certain lines in for that big lunker thats down there - you might even be able to see him - but he just isnt biting yet.

Anyway thats my fishy take on it!

Frank McGovern

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[DomainMagnate]

Most domainers just do what they consider most profitable

You also forget about parking, which is the main revenue source

Problems with developing your domains are:
1. You won't get any revenue at first, as you would with parking the domain
2. It will take you lots of time and some resources to get the site to grow and start earning some money.
3. You'll need even more time to maintain the site and make sure it continues to grow.

Of course if the site grows big it's well worth the effort, but not always..
I now only develop the domains that have really high developing potential.


~MG

 

[FuseFX]

I like to think of my company as a Private Equity Firm. Afterall, we find undervalued domains and websites, buy them out, add value to them and sell them. =)

 

[Poohnix]

I'm definitely a 2… I invest in domains as a long term investment, even if I don’t develop many of my domains. I hardly ever sell at reseller prices, (even if it happens), and I usually don’t sell if I think I’ll get a better price next year…
For me it’s not a way of making a living, I’m not a day trader in domains, but rather a way of investing money made from other sources.

 

[randomo]

Started out in Group 1 (& have been doing well enough there), gradually moving into Group 3, don't have the patience for Group 2.

 

[katherine]

You need to add a 'webmaster' category for those who purchase top domains to develop them into businesses.

 

[hugegrowth]

I put my domains into those categories. Some I am willing to let go to resellers, some I hold for end user type prices, and others are in between. And I try to price them accordingly. It's hard to get a good domain you know has great potential to an end user, and harder to give them up for cheap prices. That said, sometimes you just need to raise cash to keep going. My goal is to make that one or two big sales that will protect the rest of my investment, or get a domain development revenue stream going that will do the same. You read about some domainers who had that moment where things changed and took off for them, I'm still trying to make that happen - and enjoying it all meanwhile!